Market Overview

Markets Close Higher Ahead Of Busy Earnings Season

U.S. stocks rose ahead of next week's busy earnings schedule, but still finished lower for the week.

On Tuesday, Yahoo! and Intel kick off earnings in the tech sector with eBay following on Wednesday.

Investors will also see results from Citigroup, Goldman Sachs and JPMorgan Chase in the coming days.

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  • The Dow gained 0.17 percent, closing at 16,943.81.
  • The S&P 500 gained 0.15 percent, closing at 1,967.57.
  • The Nasdaq gained 0.44 percent, closing at 4,415.49.
  • Gold lost 0.04 percent, trading at $1,338.60 an ounce.
  • Oil lost 2.24 percent, trading at $100.62 a barrel.
  • Silver lost 0.04 percent, trading at $21.50 an ounce.

News of Note

The U.S. Treasury budget posted a $70.5 billion surplus in June. Receipts rose 13 percent to $323 billion from a year ago while spending rose 49 percent to $253 billion.

Portuguese based Banco Espirito Santo said that its capital buffers will protect itself from losses incurred from its parent group.

Argentina will send a team of technocrats instead of its Economy Minister Axel Kicillof to enter a new round of negotiations with holdout debt investors.

Analyst Upgrades and Downgrades of Note

Analysts at Barclays maintained an Equal-weight rating on American Airlines (NASDAQ: AAL) with a price target raised to $47 from a previous $41. Shares gained 0.14 percent, closing at $42.88.

Analysts at Canaccord Genuity maintained a Buy rating on Apple (NASDAQ: AAPL) with a price target raised to $112 from a previous $102. Shares gained 0.21 percent, closing at $95.23.

Analysts at Citigroup maintained a Buy rating on B/E Aerospace (NASDAQ: BEAV) with a price target raised to $109 from a previous $102. Shares gained 0.70 percent, closing at $94.10.

Analysts at Citigroup maintained a Buy rating on Best Buy (NYSE: BBY) with a price target raised to $36 from a previous $31. Shares lost 1.97 percent, closing at $29.89.

Analysts at Barclays maintained an Overweight rating on Delta Air Lines (NYSE: DAL) with a price target raised to $49 from a previous $42. Shares lost 0.59 percent, closing at $37.23.

Analysts at JMP Securities maintained a Market Outperform rating on Lazard (NYSE: LAZ) with a price target raised to $56 from a previous $54. Shares lost 0.51 percent, closing at $50.89.

Analysts at Cowen & Co initiated coverage of Philip Morris International (NYSE: PM) with a Market Perform rating and $91 price target. Shares gained 0.60 percent, closing at $85.41.

Analysts at Wells Fargo downgraded Procter & Gamble (NYSE: PG) to Market Perform from Outperform. Shares lost 0.55 percent, closing at $81.16.

Analysts at Barclays maintained an Overweight rating on Southwest Airlines (NYSE: LUV) with a price target raised to $33 from a previous $28. Shares gained 0.62 percent, closing at $27.44.

Analysts at Citigroup maintained a Neutral rating on Textron (NYSE: TXT) with a price target raised to $41 from a previous $40. Shares gained 1.47 percent, closing at $37.89.

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Analysts at Barclays maintained an Underweight rating on United Continental (NYSE: UAL) with a price target raised to $46 from a previous $42. Shares gained 1.17 percent, closing at $45.70.

Equities-Specific News of Note

Analysts at KGI speculated that Apple's (NASDAQ: AAPL) iWatch mass-production will only begin in late November with just three million devices shipped in 2014. The analysts reiterated past reports stating that the device will feature a sapphire cover. Shares gained 0.21 percent, closing at $95.23.

Unilever (NYSE: UL) sold its Slim-Fast brand to private-equity firm Kainos Capital for an undisclosed term. Shares of Unilever gained 0.43 percent, closing at $44.89.

The NHTSA will investigate Ford (NYSE: F) over potentials issues involving steering on older vehicles. Shares gained 0.98 percent, closing at $17.47.

According to Reuters, URS Corp (NYSE: URS) has held talks with rivals and buyout firms over a potential sale of the company. The company has hired bankers at Citigroup and DBO Partners as advisers. Shares of URS hit new 52-week highs of $56.70 before closing the day at $52.02, up 2.14 percent.

Wynn Resorts (NYSE: WYNN) is under investigation by Macau authorities over a $50 million payment the company made to an entity with possible political links. Shares lost 0.23 percent, closing at $202.73.

Salesforce.com (NYSE: CRM) has purchased RelateQ, a provider of analytic-based cloud CRM software for $350 million in stock. Shares lost 0.17 percent, closing at $54.21.

CME Group (NYSE: CME) and Thomson Reuters (NYSE: TRI) won the rights to operate the London silver fix. CME will provide a price platform while Thomson Reuters will be responsible for administration and governance. Shares of CME Group gained 0.51 percent, closing at $70.49 while shares of Thomson Reuters lost 1.32 percent, closing at $26.15.

The Senate Finance Committee formally requested Gilead Sciences (NASDAQ: GILD) to explain how it derived a $84,000 full-regimen price for its Solvaldi therapy. Shares hit new 52-week highs of $89.98 before closing the day at $88.73, down 0.24 percent.

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Whirlpool (NYSE: WHR) announced it will purchase a 60 percent stake in Indesit for more than $1 billion from Fineldo and the Merloni family. Shares gained 1.11 percent, closing at $140.76.

Exxon (NYSE: XOM) plans to invest more than $1 billion in expanding diesel fuel production in Antwerp, Belgium. Shares lost 0.81 percent, closing at $101.74.

AbbVie's (NYSE: ABBV) CEO Rick Gonzalez will meet with Shire (NASDAQ: SHPG) representatives to discuss potential acquisition terms. Shares lost 1.49 percent, closing at $54.96.

Yum! Brands (NYSE: YUM) will update its Cantina Bell menu next week with meat options and protein items such as Greek yogurt. Shares lost 0.15 percent, closing at $82.35.

First Solar (NASDAQ: FSLR) plans to abandon its efforts to build a 2GW solar plant in China after several years of failed negotiations. Shares lost 0.38 percent, closing at $63.43.

Chevron (NYSE: CVX) reported an interim second quarter update and said that its earnings will be higher than the first quarter due to asset sales and an absence of impairments. Shares lost 1.37 percent, closing at $128.47.

Mondelez International (NASDAQ: MDLZ) will create a stand-alone unit for its European cheese and grocery business. Shares hit new 52-week highs of $39.54 before closing the day at $38.42, up 1.13 percent.

According to Japanese media sources, SoftBank is near a deal to finalize a merger between Sprint (NYSE: S) and T-Mobile U.S. (NYSE: TMUS) Shares of Sprint gained 3.64 percent, closing at $8.55 while shares of T-Mobile U.S. gained 1.89 percent, closing at $33.50.

Halliburton (NYSE: HAL) signed a joint venture with Chinese oilfield service provider SPT Energy to tap tight oil and gas reserves in western China. Shares lost 0.53 percent, closing at $68.99.

According to Bloomberg, Reynolds American (NYSE: RAI) could announce its acquisition of Lorillard (NYSE: LO) as soon as July 14. Reynolds American confirmed in a statement that it is in talks with Lorillard over an acquisition. Shares of Reynolds American lost 0.82 percent, closing at $61.75 while shares of Lorillard hit new 52-week highs of $67.28 before closing the day at $66.01, up 4.63 percent.

Winners of Note

ChannelAdvisor noted that Amazon.com's (NASDAQ: AMZN) June same-store sales rose 34.4 percent, noticeably larger than May's 28.1 percent gain. Meanwhile, Amazon has officially requested permission from the FAA to fly drones for its delivery services. Shares of Amazon gained 5.57 percent, closing at $346.19.

Glu Mobile's (NASDAQ: GLUU) CEO Niccolo de Masi said during an interview that its Kim Kardashian: Hollywood game is the “biggest game of the year” with some analysts speculating the game will produce $200 million in annual revenue. Shares hit new 52-week highs of $6.09 before closing the day at $6.00, up 11.73 percent.

The FCC approved a plan to spend $2 billion in 2015 and 2016 to equip schools and libraries with Wi-Fi, prompting speculation that Aruba Networks (NASDAQ: ARUN), Ruckus (NYSE: RKUS) and Aerohive Networks (NYSE: HIVE) will play a role in the initiative. Shares of Aruba Networks gained 7.18 percent, closing at $17.46 while shares of Ruckus Wireless gained 7.90 percent, closing at $11.88. Also, shares of Aerohive Networks gained 8.05 percent, closing at $8.19.

Decliners of Note

Rent-A-Center (NASDAQ: RCII) reported yesterday that its second quarter results will fall below expectations due to “macro-economic pressures” that continue to affect its financially constrained customers. The company sees its EPS being $0.36 to $0.38, below the consensus estimate of $0.48. Revenue is guided to be $773 million, below the consensus estimate of $786 million. The company also said that it plans to enter the smartphone business by offering cellphone rentals without a need for a deposit or credit check. Shares lost 10.94 percent, closing at $25.88.

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The FHFA released its proposed Private Mortgage Insurer Eligibility Requirements which found Radian Group (NYSE: RDN) lower by 2.8 percent and MGIC Investment (NYSE: MTG) lower by 2.6 percent. The newly reviewed rules require a higher capital standards on the mortgage insurers that Freddie Mac and Fannie Mae do business with. Shares of Radian Group lost 5.36 percent, closing at $13.77 while shares of MGIC Investment lost 9.52 percent, closing at $8.36.

Earnings of Note

This morning, Wells Fargo (NYSE: WFC) reported its second quarter results. The company announced an EPS of $1.01, in-line with the consensus estimate. Revenue of $21.06 billion beat the consensus estimate of $20.82 billion. Net income for the quarter for the quarter rose to $5.73 billion from $5.52 billion in the same quarter a year ago as net interest rose $176 million from a quarter ago to $10.8 billion while non-interest expenses rose $246 million from a quarter ago to $12.2 billion. The bank's return on assets fell to 1.47 percent from 1.55 percent a year ago while return on equity of 13.4 percent fell from 14.02 percent a year ago. The bank's Common Equity Tier 1 ratio rose to 11.31 percent from 10.71 percent a year ago. During the bank's conference call the company warned that its loan loss reserves will decline after rising over the past four years. Shares lost 0.62 percent, closing at $51.49.

Quote of the Day

"To make the move I needed the support of my wife and my mom, who can be very tough. The letter from Dan Gilbert, the booing of the Cleveland fans, the jerseys being burned -- seeing all that was hard for them. My emotions were more mixed. It was easy to say, “OK, I don't want to deal with these people ever again.” But then you think about the other side. What if I were a kid who looked up to an athlete, and that athlete made me want to do better in my own life, and then he left? How would I react? I've met with Dan, face-to-face, man-to-man. We've talked it out. Everybody makes mistakes. I've made mistakes as well. Who am I to hold a grudge?" - NBA superstar LeBron James explaining his decision to return to the Cleveland Cavaliers.

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